The India-UK Free Trade Agreement (FTA) marks a significant milestone in bilateral ties, aiming to benefit farmers, MSMEs, and the textiles sector while protecting India’s core interests, Commerce and Industry Minister Piyush Goyal said during an interaction in London. Highlighting Prime Minister Narendra Modi’s leadership, Piyush Goyal underlined the deal’s potential to transform trade, investments, and services, ensuring it becomes a ‘win-win’ for both nations.
Piyush Goyal said the agreement would provide better market access for India while safeguarding key domestic sectors. The Union Minister emphasised that under PM Modi’s guidance, the FTA was finalised to align with India’s long-term economic goals while respecting the interests of farmers, MSMEs, and sensitive sectors.
Protecting Farmers and Strengthening MSMEs
Piyush Goyal detailed that India has excluded dairy products, edible oils, and apples from the trade pact to protect domestic farmers, while ensuring zero duties on 95% of agriculture and processed food items exported to the UK. He further highlighted that no tariff concessions were granted on oats, ensuring critical segments of Indian agriculture remain shielded while opening avenues for processed goods in the UK market.
The agreement offers fresh opportunities for India’s MSME sector, particularly in aircraft parts, auto components, and engineering goods, enabling them to expand into the UK with competitive advantage. Piyush Goyal expressed confidence that the textiles sector would experience a surge in demand under the FTA due to zero-duty access, enhancing India’s position in the UK market.
Opportunities in Trade, Investment, and Services
Piyush Goyal described the FTA as a game-changer in trade, investments, and the services sector, stating it would foster growth for both nations. The agreement, signed in the presence of Prime Ministers Narendra Modi and Keir Starmer, also introduced the Double Contribution Convention (DCC). Under this, Indian professionals working in the UK for short durations can now contribute towards their provident fund accounts in India instead of paying into the UK’s social security, securing their savings for the future while benefiting from tax-free returns.
The agreement is set to significantly benefit India’s food processing sector. Currently, India exports over USD 14 billion worth of processed agriculture and food products globally, while the UK imports around USD 50 billion of such items, with India’s share being just over USD 300 million. The FTA aims to increase this share by leveraging zero-duty benefits and enhanced market access.
Piyush Goyal also commented on the broader context of India’s trade strategy, indicating that trade agreements must be equitable. Referring to the pending India-US trade deal, he stated, “The deal has to be a win-win. It cannot be a one-sided deal where only one party gets all the advantage,” reiterating India’s commitment to ensuring fairness in all future trade negotiations.
The India-UK FTA, achieved after years of negotiations, is expected to double bilateral trade by 2030, unlocking new avenues for cooperation while enhancing the economic and people-to-people connect between the two nations.
